A Tax Proposal That Doesn't Suck
Devoid
As you've no doubt noticed, our economy has sort of gone down the toilet in the last month or so. Since our government got the brilliant idea to try to fix something that wasn't broken. I don't feel the need to point any fingers, but I think most know who to blame. Remember how the economy was booming, not too long ago? Wages were wonderful, food was cheap, and the skies were filled with rainbows and unicorns.
And then a series of tax changes got rammed through Congress, progressively effing things up with each subsequent change. Most of them seemed pretty random, and while they had their supporters, there were others who thought they kind of sucked. And lo and behold, our booming economy now sucks. Food is way too damn expensive, we barely have any frigging weapons, and our former paradise has turned into a dystopian hellhole. And on top of it all, I've heard complaining from multiple business owners that despite these anti-consumer taxes, they're having trouble making any profit too.
(artist's interpretation)
So these taxes are benefitting nobody. As a patriot, and someone who has some experience making economies work, I thought I should put forth a suggestion to fix this mess. And as it turns out, I sure came up with a brilliant proposal.
On All Goods:
Income Tax: 15%
Import Tax: 1%
VAT: 1%
You may be thinking "hey, this looks vaguely familiar...". And you would be correct. These are the same numbers we set the first time. We gathered up economic minds from near and far, and sat down and hammered it out. Myself, Necros Xiaoban, kurojca, and others from every background in eNZ gathered together. We negotiated these figures, agreed on them, enacted them, and watched our economy enjoy spectacular success with them.
But then one day, a certain faction within the government realized that it had enough votes, and
started
ramming
bad
tax
changes
through
Congress.
It was just the first wave, and of course more followed. The economy trembled violently, as though the hammer of Thor was being slammed into its very foundation with mighty blows.
find your own Thor pic
So, why 15-1-1? In the shortest possible terms, it provides the greatest purchasing power for our citizenry as well as military (and thus the greatest possible firepower), as well as deep supply of all goods, while still establishing an environment in which the economy will be efficient and companies can be strong.
(I'm going to cover the topic in short, but you can read further on the subject here)
Long story short, income taxes are the fairest and most efficient way to generate revenue. They hit everybody who works, which includes two clickers. I think most would support ensuring that two-clickers bear their fair share of the tax burden. Smart company owners don't pay it on their earnings, which is fine, as governments typically count on such revenue. PM me if you're a business owner who doesn't know the trick to take money out of a company without paying taxes on it.
VATs disproportionately affect our most active people, those who consume the most. I think it is self-explanatory why this is bad.
Import taxes have the same effect as VATs, except they also decrease our supply by discouraging exporters. In line with the laws of supply and demand, this makes all stuff more expensive, and gives us less of it.
All 3 are, in the end, paid by the eNew Zealander.
The 15-1-1 model ensures a fair and balanced source of revenue generation, while ensuring that the NZD goes a long way. The income tax level can be adjusted upward or downward to adapt to necessary revenue levels; as long as the other two stay at 1%, it will lead to an efficient and successful economy, and a strong nation.
Tax changes that keep VATs and especially tariffs high are doomed to fail.
- Devoid
Comments
dude, new zealand sucks
You don't get it, do you? The prices are rising everywhere because raw companies produce only 50% as of before. If you look around, food prices in NZ are on a totally normal level.
Price in Gold per q1 foo😛
--
New Zealan😛 0.0253 G
Serbia: 0.0292 G
Sweden: 0.0255 G
Belarus: 0.0255 G
USA: 0.0216 G
Russia: 0.0238 G
---
You also have to consider that with the new raw system, productivity also depends on how many different ressources a country has. NZ gets only 10% bonus on food production, while company owners in the US get 20%.
You don't need higher taxes because of it... You can gain a profit in the long run if you lower taxes by stimulating the economy (ie the people who want to buy from our market, newbs, etc etc.)
The crisis has more to do with our lack of population than any fiddling with the tax numbers. No-one in their right mind will buy an import license because we don't have a big enough population to give them a profit. There are bigger, juicier markets out there and a comsetic change to our income tax rates will not resolve this.
The noobiest noob can get a job paying $10 a day and buy plenty of food. The old tax system did nothing to boost our population levels and if anything the 15% income tax would have put people off coming here.
We need more workers, to create a bigger market an encourage imports and make our own companies more competitive. I'd favour a 5 5 5 model combined with an advertising campaign to get poor active people from overseas to come here and work whilst not necessarily going for citizenship. The tax for everything is less, but the idea is that these rates would encourage migrants and businesses to come here and the increased revunue would lead to more tax revenue.
reaktioner, I'm quite aware of the RM changes. I realize that everyone's prices have gone up. That said, ours would be better under my proposed system. Also, if we block out the more efficient companies from selling in our market, that only further serves to limit our firepower and strength as a nation.
DDV - First off, economic migrants only show up if we're the highest paying nation *in the world*. In a nation our size, that isn't going to happen, full stop. Also, if you think nobody is going to buy an import license here, you aren't paying attention. We have a fair few, some of which aren't selling here now due to these oppressive tariffs.
>We need more workers
Not gonna happen if the New Zealand market prices are as crappy as they are right now.
Devoid is an international economic expert.
i do not believe in one box of all. This scheme helps foreign companies, an those who live abroad, who will make profits without paying any tax to government.
taxes should be on a sliding scale, where little tweaks are done to respond to situations!
you say that economy sucks now, and that it was heaven before! i am not trying to contest that, certainly now Food is expensive. but we need some hard evidence.. ie numbers, the economy vital signs?
i do not believe in one box of all. This scheme helps foreign companies, an those who live abroad, who will make profits without paying any tax to government. x2
Devoid, keep up the good commentary. Let's see for another month or two to see the actual impact of the tax regimes.
Till then, keep the VOICES up and louad!
I had numerous Food and Grain companies that capped the price of food and paid the best wages as I was more then happy to make minimal profits.
There is certainly scope in the eNZ economy for someone to do the same should they share the same social-liberal stance as myself and are immune to the many, many complaints they'll receive from other company owners complaining about their margins/lack of ability in running a company.
Before I left eNZ I did a survey of the entire market that consisted of production values and speculated profit margins.
I would be intrested to see if the figure for the CEO 'gouge' has remained consistent or wheter it has increased before blaming the current government for what may be the greed of eNZ company owners.
tl;dr Show us the math!
A quick look at your weapons market shows increased gouging/profit margins even at lower levels.
I still own companies in the eUK, and I am willing to sell q2 and q3 rifles at reasonable prices. Hell, most of the time I send gold to those companies, buy food and weapons and donate them back to myself... its cheaper than this madness! I understand that most people can't do this, but the prices here are definitely getting out of hand. I sell my 60/30 rifles for 27 NZD.... almost 5 dollars in taxes, but I haven't changed my prices once in about 2 weeks. Most other companies change their prices daily!!!
but who would buy them?
New players are better off food fighting with no weapons.
Older players are better off spending the money on Lana.
Frankly buying any weapon is a rip-off unless the fight is deadly important in which case yoou may as well splash out on either Q3's or Q5's depending on your level.
Having taken a deeper look......There's not all tht much wrong with the economy!!!
Couple of worrying points that may need addressing;
1. Differing levels of taxation in Iron and Grain.
Worst case this may leade to eNZ losing it's grain industries and therefore its food industries or at the very least seeing a big rise in food prices (as is happening but for different reasons).
2. The move away from Q1 food production by the workers.
Staffing levels in Q1 food have halved and you may get the same problems as outlined in the above case.
Also...wages have fallen (in gold purchasing terms) that's due to the new formulae and the prices its producing for all companies Q3 and below.
Q4 and above are gouging eNZ citizens hard!
Econ 101: Free trade benefits all nations more then high tariffs. Also overly high taxes will actually lower revenue (although it is difficult to find the sweet spot to maximize tax revenue).
Econ 102: Free trade does not equal fair trade! Tariffs used to ensure parity as opposed to autarky is what you are really after.
Truth is we can throw lots of words around but at the end of the day only figures matter and going from 13% income, 3% VAT to 15%,1% means that a majority of the citizens of eNZ (those 65% employed in Grain and weapons) would actually find themselves worse off then at current.
Come back to the eUS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The One Eye model says "Stuff>Gold"
This means that having a great supply of goods on the market is more important than high government revenue.
The government isn't spending any of the income anyway, so why not the let the average man be able to afford guns for himself, eh?
Okay, undeniable fact: there is barely any food in the market at the moment... Without abundant food people can't fight often. When people can't fight they tend to get bored, move, not use weapons, etc. At the moment it seems we have enough to sustain working at ever increasing food prices.
Total production of health points over the past 2 weeks have dropped from 8,930pts to 5470pts or 3,700units to 2,000units for the Q1 and Q2 food industries.
When eNZ got Iron people went Fe Crazy! With its high internal price, higher income tax and current oversuppply - that should drop away and maybe/hopefully the workers will return to the food sector and kick out another 1,000pts/500units daily.
There's nothing intrinsically wrong with the eNZ economy, slightly higher prices (upto Q3, not the Gougy higher Q stuff) are the cost that eNZ citizens have to bear for a while if native industries are to grow beyond Q2 status and move eNZ out of it's start-up phase.
You cant make strong ecomomy with population of 500 active players...
I have 3 companies in NZ, one work with 2 workers, second with 5 workers and third have no workers and it is for sale....
my goods are expensive and not competetive even with import taxes like this, becouse wages are too high and there is a lack of workers....
Not to speak about the bonuses....
MCMOOX je bio ovde!!!
i agree with Mcmoox, that we can't...
but to make a solution we need to open food market (only for the time being)... this will bring more cheap food, will encourage more workers to come, and workers to be productive, more workers means control over high salaries and better productivity in food market, later the taxes can be raised a little to protect the re-launched food sector..
>You cant make strong ecomomy with population of 500 active players...
I sort of disagree with that statement. Sure, we'll never be a US or Serbia with this population. But we can make the best of it, and have our own level of prosperity.
If we consider that your companies aren't successful even with highly protected markets, one can only assume this means our wages (cost of production) are too high. And the way to fix that without further exploiting the workers is by slashing tariffs and opening up our markets. This will bring both prices and wages down, and if nothing else, provide exporting opportunities without diminishing the purchasing power of our citizens.
The source of the problem is not wheter the cost of production is high or low but the actual terms of production i.e the formula.
Skill 10 worker (90health) can produce worlds cheapest grain (making subsequent local and export sales) for a daily wage of 27.5NZD.
The same wage in a Q1 food company means food priced at 1.13NZD (1.17 with VAT) if using that cheap grain. 1.25NZD (1.29) if you use the current prices
If you fully open the markets by slashing Import taxes and even VAT then low quality food in eNZ can be driven out of business as they would have to lower wages to compete and their workers can simply switch to Iron and Grain to keep their previous level of earnings.
If your intention is to make eNZ totally reliant on manufactured imports then fair enough!
If you actually want to level out the disparity between Raw and manufacturing in eNZ then you have either have to;
1. Collect more manufacturing boosters (and even then complete set won't help unless you affiliate to a RM company)
2. Push the value of the NZD higher.
3. Have an RM income tax and a Manu income tax approx - 40%/10%
Best bet is to try a little of each - Get 1 (ideally 2) boosters, keep the exchange rate at 0.02 and go for a 10%/15% tax rate.
Devoids crusade for open markets isn't completly reckless (although it smarts for the 16 CEO's of the current active food companies and writes off 1250 to 1500G's worth of companies) and is certainly the easiest path to take as long as you either have;
A. A dedicated food company or companies in eNZ, staffed by NZDF types who can stockpile goods and help cap the markets.
B. A 'food' ally. A nation with great food production bonuses (but no Grain) who you can trade with in all circumstances.
C. Some scheme to entice companies to import to eNZ at fair prices. Paid licenses, contracts, straight gold conversion....
http://www.erepublik.com/en/article/why-a-15-1-1-tax-would-suck--1607335/1/20
>If your intention is to make eNZ totally reliant on manufactured imports then fair enough!
>If you actually want to level out the disparity between Raw and manufacturing in eNZ then you have either have to...
I don't want to do either. I want to make the economy as efficient as possible, and have investment and workers flow to where they will bring the greatest return. My system will do that.
And we'll never be entirely dependent on imports nor close to it; it just doesn't work that way in practice. All countries, even with wide open economies, maintain significant manufacturing sectors.
Your system WILL allow workers and investment to flow and they'll follow the money into RM's where the most returns for least risk can be made as described in my article - http://www.erepublik.com/en/article/why-a-15-1-1-tax-would-suck--1607335/1/20
I step-by-step showed where eNZ would go from where it is now to where it will be if your 15/1/1 system was introduced (ignoring exchange rate variations and communes as you yourself make no note of them).
Please do map out your vision either in an article or on the forum.